Md. Blues OK'd to charge premium in 16 counties Insurer will get $75 per month in rural areas for Medicare HMO

Blue Cross Blue Shield of Maryland has received approval from federal regulators to begin charging a $75-a-month premium for its Medicare HMO in 16 rural Maryland counties, the insurer said yesterday.

Linda Wilfong, a spokeswoman for Blue Cross, said the Health Care Financing Administration had approved Blue Cross' request to begin charging a premium to some subscribers, effective this month.

The charges will hit about 10,000 of the 23,000 members of MediCareFirst, as the Blue Cross HMO is called. Until now, Blue Cross has been offering the HMO with no monthly premium to members, since it receives a monthly payment from the federal Medicare program for each of them.

MediCareFirst membership will continue to be premium-free in Baltimore and its suburbs.

Blue Cross, however, said Medicare payments are lower in rural counties -- $356 per member per month in Somerset County, compared to $632 in Baltimore -- so the HMO is losing money. It lost $5 million through September this year on the Eastern Shore alone, it said.

Another Maryland HMO, Optimum Choice, is seeking a $65 premium per member in Caroline and Wicomico, and a $45 premium in Allegany, Washington, Frederick and Howard. It also wants to drop the option of prescription drug coverage up to $2,000 a year, which it has been offering for $35 a month.

Optimum Choice has 11,000 Medicare members in Maryland, Delaware, Virginia and the District of Columbia.

It was not immediately clear how many would be subject to the new premium.

Rapid growth

Medicare HMOs have been growing rapidly nationally -- enrolling 5.9 million people, up from 2.1 million three years ago -- because they cost less and offer more benefits than so-called "Medigap" insurance policies.

But the lower rural rates have caused a number of HMOs to charge premiums, cut benefits or pull out of rural counties altogether.

Last year, Mid Atlantic Medical Services Inc., which operates Optimum Choice, withdrew from 59 counties in the region, including, in Maryland, Cecil, Dorchester, Garrett, Harford, Queen Anne's, St. Mary's, Somerset, Talbot and Worcester, because it said it was losing money.